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What Benefits Come With Workers' Compensation Insurance

Different U.S. states started enacting workers' compensation laws at the beginning of the previous century, requiring businesses to provide wage replacement benefits, medical expense reimbursements, and other benefits to employees who suffered work-related accidents or illnesses. The majority of companies with more than one employee are required by law to offer workers' compensation benefits, even though the particular regulations vary by state today.

Having adequate workers' compensation coverage is more than just a cost of doing business. When seen as part of a comprehensive workplace safety policy, it represents a strategic investment in a company's most valuable asset — its employees.

How Common Are Work-Related Injuries 

what are workers compensation benefits

Every day, workplace injuries occur. Workers in all industries — regardless of vocation — are exposed to a wide range of injury risks. Millions of people are permanently or temporarily unable to perform their jobs each year due to these injuries.

Every seven seconds, a person gets hurt at work in the United States, according to the National Safety Council. This means that 540 work-related accidents occur per hour, 12,900 work injuries per day, 90,400 work injuries per week, and a staggering 7 million work-related injuries per year. 

Additionally, approximately 1,054 people suffer a job-related injury severe enough to require immediate medical attention every day.  These injuries also cause 99 million days of lost productivity annually, according to the NSC. That said, each work-related injury results in an average of 21 days of disability. This implies that some employees can swiftly return to work, but it also means that many employees suffer from long-term disabilities as a result of their workplace injuries. 

It's also important to remember that these statistics on work-related injuries only include known injuries. Too many employees fail to report workplace injuries and never get the medical care or monetary compensation they require to recover.

Importance Of Getting An Injured Worker Back To Work

Long absences from work might negatively affect a person’s future employment prospects and, consequently, financial well-being. The duration of time off from work and subsequent periods of unemployment are lower for injured individuals who return to their pre-injury employer than for those who change employers, according to a study of injured workers in Wisconsin by the Workers Compensation Research Institute.

Workers' Compensation Insurance is critical to facilitate the injured worker's return to work. The benefits they receive from workers' comp ensure they get the appropriate medical care they need to recover. It also provides them with the necessary financial compensation for a portion of the income they lose while they cannot return to work.

What Is Workers’ Compensation Insurance For?

Employers are legally obligated to create a safe and secure working environment for their employees. This includes eliminating any safety hazard that might cause injury to a worker. However, there is no workplace that is 100% immune to accidents. So when they do happen, workers' compensation insurance provides assistance. 

Workers comp is a program designed to help the injured or deceased employee’s family. The employer is obligated to provide financial support and wage replacement benefits. This will help cover an injured worker’s medical treatment and help replace some of their lost income during their time off from work to recover. 

This legal obligation to provide worker’s compensation insurance to employees is an employer’s statutory liability. Basically, it is required by law. As per the 2017 amendment in the Employee Compensation Act of 1923, employers are required to inform their employees about their legal entitlements to workers’ compensation insurance. These should also be detailed to them in the language they understand the most.   

Reasons Why You Need Workers’ Compensation Insurance

Workers’ compensation existed more than a century ago and has been referred to as the “grand bargain” between employers and workers. Basically, worker’s compensation insurance is a cooperative agreement to reduce conflicts that might arise between employers and employees when work-related accidents occur to employees. 

It is termed a grand bargain because the employee will receive workers’ compensation benefits regardless of who is responsible for the workplace injury. In exchange, the employer will not be held accountable for legal claims or lawsuits related to the injury. 

So, if you are an employer, here are some reasons why having workers’ comp insurance is important.

Workers’ Compensation Protects Your Employees

Even the safest workplaces occasionally experience situations that lead to an employee getting hurt or injured. In fact, more than three million non-fatal occupational illnesses and injuries were reported in 2014, according to a Bureau of Labor Statistics report. More often than not, most employees struggle to pay for costly out-of-pocket medical expenses as well as makeup for lost wages. Fortunately, workers' compensation insurance acts as a safety net to assist injured workers in obtaining the medical and wage replacement benefits they need to recover.

Workers’ Compensation Protects Your Business

Businesses can avoid the real cost of an employee’s medical bills and lost wages following a workplace injury or illness by having workers' compensation insurance. Without it, the medical expenses associated with even one major workers’ compensation claim could result in permanent financial harm to your business. This is especially true considering the soaring costs of healthcare services. Additionally, if your company does not have workers' comp, employees or their families may file a civil lawsuit for workplace injury or death.

Workers’ Compensation Allows Your Business To Operate

Workers’ compensation insurance is mandated by statutes in each state. As a business owner, not adhering to the labor laws — including workers’ comp —  established by federal and state governments could lead to you being prosecuted, fined, or even imprisoned. This outcome can devastate your business and may even result in closure or bankruptcy. Therefore, it is important to understand what workers’ compensation laws apply to your business. It is also equally important that you comply with these laws. 

Most of the time, you can satisfy workers' compensation requirements by getting a coverage plan from a nearby insurance agency or carrier.

Why Workers’ Compensation Insurance Is Important For The Economy

Workers’ compensation continues to play a crucial role in a state’s economic growth. Below are three (3) reasons why having workers’ compensation insurance benefits the nation’s economy: 

1. Employees Can Avoid Being Buried In Debt 

After suffering a work-related injury, a person may experience a number of financial issues, including mounting medical expenses for the treatment of their injuries and other costs like child care.

Moreover, they will deal with the stress of not being able to earn a living while they are recovering. Workers’ comp helps lessen these burdens by providing coverage for medical treatment and lost wages while employees cannot work. 

2. Employees Can Return To Work Sooner

CDC estimates that the U.S. loses at least $225.8 billion annually due to illness and injuries resulting in absenteeism and lost productivity.

With workers' compensation, both the national and individual economic costs of work-related injuries are decreased. Workers' compensation is intended to give employees the financial support they need as soon as possible. Therefore, workers can get medical care and treatment right away, which enables them to recover quicker and get back to work sooner.

3. Workers’ Compensation Improves Workplace Safety

Employers are expected to keep their employees' working conditions fairly safe. The Bureau of Workers’ Compensation (BWC) has taken significant steps to achieve this goal through the Workers' compensation program.

In addition to taking action against firms that are alleged to have hazardous workplaces, the agency also offers incentives to encourage employers to maintain a safe workplace to reduce work-related injuries or deaths.

Are you a veteran suffering from a condition or illness you developed while serving in the military? Find out how you can apply for a VA claim for disability compensation in this article by Disability Help. 

Chloe Powers
Chloe works with policymakers on behalf of Disability Help to support their work at a strategic level, ensuring the conditions are in place for creative individuals and organizations to grow, reach their potential and effect relevant, sustainable change.
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